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Last Updated: 13th June, 2024

Being self-employed offers incredible freedom and flexibility, but it can present unique challenges when you want to secure a mortgage. At Home Loan Experts, however, we’ve had years of experience helping self-employed borrowers get approved. From putting your finances in order to ensuring all the documents are in place, we’ve got you covered.

In Australia, you’re considered self-employed if you:

  • Use a registered ABN
  • Manage your own tax and superannuation.

Who Qualifies For Self-Employed Home Loans?

When determining whether you qualify for a self-employed home loan, a lender will look at:

  • The duration of your ABN registration
  • The type and characteristics of your business
  • The intricacy of your trading structure.

Types of self-employed roles include, but are not limited to:

  • Business Owners: SME Owners, Founders, Franchise Owners, Sole Traders, Partnerships
  • Freelancers and Independent Contractors
  • Tradespeople: Electricians, Plumbers, Builders
  • Health and Wellness Professionals: Personal Trainers, Fitness Instructors
  • Creative Professionals: Musicians, Actors, Filmmakers
  • Professional Services: Accountants, Lawyers, Consultants

Self-Employed Home Loan Requirements

To get a home loan when you’re self-employed, you will need:

  • At least two years’ tax returns and financial statements.
We also have lenders on our panel that will accept one year’s tax returns or other alternative methods of verifying your income. If you’ve recently started your own business but remain in the same industry, then some lenders can consider your application even if you don’t yet have tax returns.
  • Evidence to prove consistent income
  • Documents like tax returns, financial statements and business records.

Home Loans For Those Self-Employed Under 2 Years

We have lenders on our panel that can approve loans for people who have been self-employed for between one and two years, as long as they have been in the same line of work for some time and have at least one year’s financials for the new business.

A good example of someone we can help is a plumber who has been operating his own business for one year and was previously employed as a plumber for five years.

If you’re concerned that your employment situation may make you ineligible for a home loan, please call us on 1300 889 743 or fill in our free online assessment form. We specialise in helping self-employed people qualify for home loan products at competitive rates!

Home Loans For Self-Employed Under 1 Year

If you’ve been self-employed for less than one year, there aren’t many options. Most banks won’t lend to you because you don’t yet have tax returns to prove your income and because new businesses have more financial uncertainty.

There is hope, though. One of our lenders can look at your income from your last job and take that as proof that you can afford the loan.

The reasoning behind this is that if you decided to close your business you could always return to working for someone else on a similar salary. On that basis, we can help you borrow up to 80% of the property value.


What Documents Are Needed For Home Loan Application

The documents required to get approved for a full-doc self-employed home loan are:

  • Personal tax returns from the two most recent financial years
  • Most recent ATO Notice of Assessment or an accountant’s letter that confirms tax returns are final and lodged with the ATO
  • Business tax return from the two most recent financial years
  • Business financial statements that an accountant prepares. These include the last two consecutive years of Profit and Loss statements, balance sheets and depreciation schedules from the most recent financial year.
  • Proof the business has traded profitably in the two most recent financial years
  • Active ABN for a minimum of 18 to 24 months.
  • Businesses that earn over $75,000 each year must register for GST. After registration, you must lodge a regular Business Activity Statement (BAS) to report how much GST your business has collected and is claiming.

What If I Can’t Provide Certain Documents?

If a full-doc application is not possible, low-doc options are available. Most lenders will accept a declaration confirming your income. The lender can then assess your loan using the declared income.

  • Lenders might charge a higher fee than the rate of a full-doc loan.
  • Even if Lenders Mortgage Insurance (LMI) is not applicable, you might be charged a risk fee for a low-doc application. This fee is usually charged for loans at over 60%-70% of the property value.

For more information see our low-doc home loans section and our alternative income verification page, or complete our free online assessment form. Our expert mortgage brokers will help you find a great lender and a competitive loan package. Speak to us today on 1300 889 743!


Why Choose Home Loan Experts For Self-Employed Home Loans?

At Home Loan Experts, we specialise in helping self-employed borrowers because we understand the unique challenges and complexities involved. Here’s why you should choose us:

Expertise In Self-Employed And Low-Doc Loans

Self-employed home loans require a level of understanding and finesse that goes beyond standard PAYG borrower requirements. These loans demand extensive income documentation, including individual and business tax returns, company financials, and Notices of Assessment (NoA). Our team excels in managing these intricate applications, ensuring a smooth and efficient process for our clients.

In-Depth Understanding Of The Self-Employees’ Needs

We recognise that self-employed borrowers have distinct finances. Our expert brokers’ deep knowledge and experience in this field allow us to navigate the specific challenges you face. Unlike staff at traditional banks, our brokers have firsthand experience working for themselves and running businesses. This unique perspective enables us to provide tailored solutions and comprehensive guidance.

Tailored Solutions And A Personalised Approach

Our mortgage brokers are equipped to offer solutions specifically designed for self-employed individuals. We take the time to understand your unique circumstances and provide a personalised approach that aligns with your needs.


FAQs: Self-Employed Home Loans

Most lenders believe that by looking at your past tax returns, they can predict how stable your business will be in the future.

Banks and non-bank lenders alike tend to be very wary if you have an income that has increased or decreased by a large amount in the last two years.

  • One lender may use the lowest of the income figures for the last two years.
  • Another may use the most recent year’s income, as shown on your tax return.
  • Some may even average the two years of income or take 120% of the lowest year’s income.
  • They may or may not then add back expenses shown on your returns.
  • Some lenders accept your six months of payslips and a letter from your accountant instead of providing tax returns and financials.

You can use our self-employed income calculator to get an idea of what your income looks like when you add and subtract certain things.

We specialise in finding the lender that will look at your documents most favourably!

Please contact us on 1300 889 743 or fill in our free online assessment form and we can help you find the lender that will assess your income in the best possible way!

To improve your chances of getting approved as a self-employed borrower:

  • Maintain organised and updated financial records, including invoices, activity statements, and bank statements, to demonstrate consistent income to lenders.
  • Provide at least two years of business financials, tax returns, and profit-and-loss statements to prove your income claims.
  • Pay credit-card bills and loans on time to maintain a good credit score and lower existing debts to improve your Debt-To-Income (DTI) ratio.
  • Track monthly cashflow to identify trends and save regularly for taxes and GST to show financial responsibility.
  • Pay ATO debts on time.
  • Carefully manage stock levels to avoid cashflow strain and review practices to order only what’s necessary.
  • Discuss home purchase plans with your accountant to optimise finances and ensure records are mortgage-ready.
  • Use separate bank accounts and financial records for personal and business transactions to simplify tracking and reporting.

Refinancing a home loan can provide benefits for self-employed individuals such as lower interest rates, improved loan terms, debt consolidation and access to home equity. To ensure a smooth refinance process, you can:

  • Prepare detailed financial records, including at least two years of tax returns, business financial statements and BAS statements.
  • Highlight business growth and recurring income contracts to determine stability.
  • Build equity by making additional loan repayments or investing in home-improvement projects.

At Home Loan Experts, we can compare options from multiple lenders and identify the ones that can help you refinance your home loan. Call us on 1300 889 743 or enquire online now.

If you make your own income, you can still qualify for a self-employed home loan.

With some lenders, you may qualify for a loan based on the following:

  • Provide two payslips OR six months’ salary credits plus an accountant’s letter as a substitute.
  • All self-salaried income is treated as PAYG.
  • Business should be operating for over two years and salary paid for at least six months.
  • Does not require any NoAs, tax returns or financials.

The types of home loans available for self-employed individuals in Australia are:

  • Full-doc loans: These are preferred if you can provide at least two years’ tax returns and NoAs.
  • Low-doc loans: These are preferred if you can’t provide at least two years’ tax returns. You might need to save a higher deposit.
  • Guarantor home loans: If you want to borrow more than 100% of the property value, a guarantor home loan is a good option.

As a self-employed borrower, you don’t always need to pay more on your home loan. If you can provide proof of your income and a lender is happy you can afford the repayments, you should qualify for the same interest rates as someone who is in a permanent, full-time role. The interest you pay on your home loan will also depend on other factors, such as your deposit amount or credit rating.

Your taxable income alone isn’t the same as the actual income that you can use to pay your commitments, including the repayments for the new mortgage. So lenders add back any expenses you’ve incurred that reduced your taxable income but aren’t a ‘real’ expense or ongoing commitment. Adding back expenses can increase your assessable income and your borrowing power.

Some examples of add backs are:
  • Depreciation
  • Asset write-offs
  • Additional superannuation
  • Net Profit Before Tax (NPBT)
  • One-off expenses
  • Interest expenses
  • Rental property expenses
  • Company car
  • Trust distributions

As you can see, this can get quite complicated. As a result, many bank employees make mistakes when assessing your income.

Lenders view tax returns as a crucial component in evaluating the financial health and stability of self-employed customers. The way your tax returns are assessed, however, can differ from one credit officer to the next. While one might just make sure they’re signed and certified and backed by notices, another might add back extra super contributions and even depreciation. Banks will also have different documentation requirements depending on if you’re a company, trust partnership or sole trader. They may ask for interim financials or cashflow projections, depending on the nature of your business and risk of your application.

Apply For A Self-Employed Home Loan

Begin your application today to benefit from our specialised services. Call us at 1300 889 743 or complete our free online enquiry form today. Let Home Loan Experts guide you through your self-employed home loan journey with expertise and care.